The Business Value of Sustainability
Business Value – Dimensions of Success
The expected business value of customers moving to SAP S/4HANA traditionally focuses mainly on business process optimization and business model transformation.
Business Process Optimisation by realising quantifiable business benefits, like inventory reduction by improved MRP or dead-stock analysis. Or reduction of risk by closely monitoring the number of days sales outstanding using Fiori embedded analytics.
In addition to that Business Model Transformation can be achieved by supplying a unified platform for growth and innovation using simplified processes or the latest and greatest intelligent technologies.
The most important and leading dimension of success of companies for the 21st century however will be in the area of Sustainability.
Sustainability – Leading Dimension of Success
“What’s good for the planet is good for business” was a clear statement made during the World Economic Forum Annual Meeting 2020 in Davos.
Companies ignoring this message will be at risk. These risks can be market or reputation related where customers and talented employees will be averting from companies that are not actively contributing to or are not transparent on their climate actions. Or regulatory risks where companies will lose their license to operate when not being compliant with current and future regulations and reporting requirements on sustainability. And finally in delivering proof of their ability to take climate actions seriously in order to stay attractive for investors.
This all makes sustainability the new and leading dimension in business value and success. As mentioned in my earlier blog, climate actions and sustainability should therefore be on the agenda of every CEO.
Transparency – The secret to success
By providing transparency to customers, suppliers, investors, employees and authorities the risks mentioned above can be mitigated and new business opportunities can be created.
In order to have actionable insights and drive performance on sustainability across the entire value chain, sustainability data must be integrated in the transactional and analytical applications of a company. Intelligent technologies, such as the internet of things, artificial intelligence, in-memory databases and blockchain can enable real-time monitoring and management of the sustainable performance of a company.
In order to successfully manage and steer sustainability performance, the following principles are applied in SAP solutions like S/4HANA:
- an holistic view to support operational and strategic decision making
- correctness of data and compliance with the latest regulations
- embedded analytics with insight-to-action capabilities
- supporting global and local requirements
- an open API based integration to cover the different use cases.
Moving to SAP S/4HANA – Making the First Step
SAP will continue to embed Sustainability as a new dimension of success into their analytical and transactional applications to enable an Intelligent Enterprise to optimize natural resources and fight climate change, not only for individual companies, but across value chains for the entire product lifecycle.
Moving to SAP S/4HANA will therefore be your first step towards a sustainable business and the 21st Century New and Leading Dimension of Success.